Moving from principles to action for energy supply that mitigates
against climate change requires a long-term perspective. Energy
infrastructure takes time to build up; new energy technologies take
time to develop. Policy shifts often also need many years to take
effect. In most world regions the transformation from fossil to
renewable energies will require additional investment and higher
supply costs over about twenty years

resources & security of supply

The issue of security of supply is now at the top of the energy policy agenda. Concern is focused both on price security and the security of physical supply. At present around 80% of global energy demand is met by fossil fuels. The unrelenting increase in energy demand is matched by the finite nature of these resources. At the same time, the global distribution of oil and gas resources does not match the distribution of demand. Some countries have to rely almost entirely on fossil fuel imports. The maps on the following pages provide an overview of the availability of different fuels and their regional distribution. Information in this chapter is based partly on the report ‘Plugging the Gap’61, as well as information from the International Energy Agency’s World Energy Outlook 2008 and 2009 reports.

status of global fuel supplies

Oil is the lifeblood of the modern global economy, as the effects of the supply disruptions of the 1970s made clear. It is the number one source of energy, providing 32% of the world’s needs and the fuel employed almost exclusively for essential uses such as transportation. However, a passionate debate has developed over the ability of supply to meet increasing consumption, a debate obscured by poor information and stirred by recent soaring prices.

the reserves chaos

Public data about oil and gas reserves is strikingly inconsistent, and potentially unreliable for legal, commercial, historical and sometimes political reasons. The most widely available and quoted figures, those from the industry journals Oil & Gas Journal and World Oil, have limited value as they report the reserve figures provided by companies and governments without analysis or verification. Moreover, as there is no agreed definition of reserves or standard reporting practice, these figures usually stand for different physical and conceptual magnitudes. Confusing terminology - ‘proved’, ‘probable’, ‘possible’, ‘recoverable’, ‘reasonable certainty’ - only adds to the problem.

Historically, private oil companies have consistently underestimated their reserves to comply with conservative stock exchange rules and through natural commercial caution. Whenever a discovery was made, only a portion of the geologist’s estimate of recoverable resources was reported; subsequent revisions would then increase the reserves from that same oil field over time. National oil companies, mostly represented by OPEC (Organisation of Petroleum Exporting Countries), have taken a very different approach. They are not subject to any sort of accountability and their reporting practices are even less clear. In the late 1980s, the OPEC countries blatantly overstated their reserves while competing for production quotas, which were allocated as a proportion of the reserves. Although some revision was needed after the companies were nationalised, between 1985 and 1990, OPEC countries increased their apparent joint reserves by 82%. Not only were these dubious revisions never corrected, but many of these countries have reported untouched reserves for years, even if no sizeable discoveries were made and production continued at the same pace. Additionally, the Former Soviet Union’s oil and gas reserves have been overestimated by about 30% because the original assessments were later misinterpreted.

Whilst private companies are now becoming more realistic about the extent of their resources, the OPEC countries hold by far the majority of the reported reserves, and their information is as unsatisfactory as ever. Their conclusions should therefore be treated with considerable caution. To fairly estimate the world’s oil resources a regional assessment of the mean backdated (i.e. ‘technical’) discoveries would need to be performed.

renewable energy

Nature offers a variety of freely available options for producing energy. Their exploitation is mainly a question of how to convert sunlight, wind, biomass or water into electricity, heat or power as efficiently, sustainably and cost-effectively as possible.

On average, the energy in the sunshine that reaches the earth is about one kilowatt per square metre worldwide. According to the Research Association for Solar Power, power is gushing from renewable energy sources at a rate of 2,850 times more energy than is needed in the world. In one day, the sunlight which reaches the earth produces enough energy to satisfy the world’s current power requirements for eight years. Even though only a percentage of that potential is technically accessible, this is still enough to provide just under six times more power than the world currently requires.

Before looking at the part renewable energies can play in the range of scenarios in this report, however, it is worth understanding the upper limits of their potential. To start with, the overall technical potential of renewable energy – the amount that can be produced taking into account the primary resources, the socio-geographical constraints and the technical losses in the conversion process – is huge and several times higher than current total energy demand.

definition of types of energy resource potential

theoretical potential

The theoretical potential identifies the physical upper limit of the energy available from a certain source. For solar energy, for example, this would be the total solar radiation falling on a particular surface.

conversion potential

This is derived from the annual efficiency of the respective conversion technology. It is therefore not a strictly defined value, since the efficiency of a particular technology depends on technological progress.

technical potential

This takes into account additional restrictions regarding the area that is realistically available for energy generation. Technological, structural and ecological restrictions, as well as legislative requirements, are accounted for.

economic potential

The proportion of the technical potential that can be utilised economically. For biomass, for example, those quantities are included that can be exploited economically in competition with other products and land uses.

sustainable potential

This limits the potential of an energy source based on evaluation of ecological and socio-economic factors.